Recent advances in the treatment of diabetes include potentially curative islet cell transplantation;however, this therapy is limited in scope by the shortage of donor islets available. Motivated by the potential benefits of this therapy for millions of patients with type 1 diabetes, researchers are exploring a variety of possibilities to create a sustainable source of transplantable islet cells. In the proposed research we will design a novel culture system for dissociated pancreatic precursor cells using photopolymerizable poly (ethylene glycol) (PEG) hydrogels, a polymer selected for its excellent biocompatibility, effective immunoisolation of encapsulated cells, and resistance to protein and cell adhesion. The overall goal of the proposed research is to explore the utility of these unique polymer scaffolds in defining culture conditions either conducive to sustaining cell growth or promoting selective differentiation into mature, insulin producing beta cells. In Aim 1 of this proposal we will investigate proliferative or beta-cell differentiation promoting benefits of ECM proteins, specifically collagen type-1, FN, and LN1, by entrapping these proteins in hydrogels along with encapsulated pancreatic precursor cells. In Aim 2, we will use the addition of mesenchymally derived growth factors, EFG, FGF7 and FGF10, to encourage precursor cell expansion in hydrogels with and without entrapped ECM molecules. In Aim 3, soluble factors known to encourage beta cell differentiation, activin A, a TGF-beta signaling molecule, and extendin-4, a glucagon-like peptide-1 agonist, will be added to hydrogel cultures to maximize selective beta cell differentiation and maturation. Pancreatic precursor cells will be isolated from the dorsal pancreatic rudiment of rat embryos and will be encapsulated into PEG hydrogels via photopolymerization. Viability and proliferation will be evaluated using ATP and DNA assays, as well as BrdU incorporation. RT-PCR determined gene expression will be used to assess differentiation fates of encapsulated precursor cells and these results will be correlated with immunohistochemical observations. Additionally, insulin release in response to glucose and secretagogue stimulation from encapsulated precursor cells will be determined. Relevance to public health: Islet cell transplantation is a potentially curative treatment for millions of insulin- dependent diabetics;however, donor shortages severely limit the number of patients that can currently benefit from this treatment. For this reason, the proposed research focuses on pancreatic tissue engineering using pancreatic precursor cells with the aim to create a sustainable cell population that may one day be useful in transplantation therapies to treat insulin-dependent diabetes.